COVID-19

Airlines may need to retool routes with decline in business travel

Meghan McCarty Carino Aug 26, 2020
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Business travelers have outsize influence on airlines, generating around half of the industry's revenues, according to analysts. Daniel Slim/AFP via Getty Images
COVID-19

Airlines may need to retool routes with decline in business travel

Meghan McCarty Carino Aug 26, 2020
Heard on:
Business travelers have outsize influence on airlines, generating around half of the industry's revenues, according to analysts. Daniel Slim/AFP via Getty Images
HTML EMBED:
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U.S. airlines are warning of major job cuts if federal aid isn’t re-upped past its October end date. American Airlines said it would cut 19,000 jobs by October. Delta Airlines may furlough around 2,000 pilots, with another 1,800 taking early retirement.

Air travel is still down about 69% from last year, and while a vaccine or effective treatment for the virus could turn things around for tourism, business travel may never be the same.

Before COVID-19, Samuel Chu enjoyed his weekly business trips from Los Angeles to Washington, D.C., for his work as an advocate for several human rights nonprofits. Now he misses it so much he’s been switching his pillow occasionally to simulate sleeping in a different bed.

“So much of my mental biological clock is sort of wired that way,” Chu said.

Business travelers have outsize influence on airlines. They often buy more expensive and profitable tickets, generating more than half of the industry’s revenues, according to airline analyst Henry Harteveldt, president of Atmosphere Research Group.

“Business travel is almost as important to airlines as jet fuel,” Harteveldt said.

But many companies have now adapted to doing more virtually, said airline consultant Jay Sorensen.

“That is a reflex that has been trained and will not go back to what it once was,” Sorensen said.

He said that may mean that common business travel routes, like New York to D.C. or LA to San Francisco, could be cut back, and some flights might become more expensive.

COVID-19 Economy FAQs

Millions of Americans are unemployed, but businesses say they are having trouble hiring. Why?

This economic crisis is unusual compared to traditional recessions, according to Daniel Zhao, senior economist with Glassdoor. “Many workers are still sitting out of the labor force because of health concerns or child care needs, and that makes it tough to find workers regardless of what you’re doing with wages or benefits,” Zhao said. “An extra dollar an hour isn’t going to make a cashier with preexisting conditions feel that it’s safe to return to work.” This can be seen in the restaurant industry: Some workers have quit or are reluctant to apply because of COVID-19 concerns, low pay, meager benefits and the stress that comes with a fast-paced, demanding job. Restaurants have been willing to offer signing bonuses and temporary wage increases. One McDonald’s is even paying people $50 just to interview.

Could waiving patents increase the global supply of COVID-19 vaccines?

India and South Africa have introduced a proposal to temporarily suspend patents on COVID-19 vaccines. Backers of the plan say it would increase the supply of vaccines around the world by allowing more countries to produce them. Skeptics say it’s not that simple. There’s now enough supply in the U.S that any adult who wants a shot should be able to get one soon. That reality is years away for most other countries. More than 100 countries have backed the proposal to temporarily waive COVID-19 vaccine patents. The U.S isn’t one of them, but the White House has said it’s considering the idea.

Can businesses deny you entry if you don’t have a vaccine passport?

As more Americans get vaccinated against COVID-19 and the economy begins reopening, some businesses are requiring proof of vaccination to enter their premises. The concept of a vaccine passport has raised ethical questions about data privacy and potential discrimination against the unvaccinated. However, legal experts say businesses have the right to deny entrance to those who can’t show proof.

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